Market news

3 December 2020
  • 10:20

    Eurozone retail sales rose more than expected in October

    According to the report from Eurostat, in October 2020, the seasonally adjusted volume of retail trade rose by 1.5% in both the euro area and the EU, compared with September 2020. Economists had expected a 0.8% increase in the euro area. In September 2020, the retail trade volume fell by 1.7% in the euro area and by 1.3% in the EU. 

    In October 2020 compared with October 2019, the calendar adjusted retail sales index increased by 4.3% in the euro area and by 4.2% in the EU. Economists had expected a 2.7% increase in the euro area. 

    In the euro area in October 2020, compared with September 2020, the volume of retail trade increased by 2.0% for both non-food products and for food, drinks and tobacco, while automotive fuels fell by 3.7%. In the EU, the volume of retail trade increased by 2.0% for non-food products and by 1.9% for food, drinks and tobacco while automotive fuels fell by 3.4%.

    In the euro area in October 2020, compared with October 2019, the volume of retail trade increased by 5.4% for non-food products. Within this category mail orders and internet increased by 28.5%, while textiles, clothing and footwear decreased by 14.0%. The volume of retail trade increased by 5.1% for food, drinks and tobacco, while automotive fuel decreased by 9.6%. In the EU, the retail trade volume increased by 5.7% for non-food products (mail orders and internet +29.2%, textiles, clothing and footwear -13.0%) and by 4.6% for food, drinks and tobacco, while automotive fuel decreased by 9.5%.

  • 10:01

    Eurozone: Retail Sales (YoY), October 4.3% (forecast 2.7%)

  • 10:01

    Eurozone: Retail Sales (MoM), October 1.5% (forecast 0.8%)

  • 09:47

    UK service providers signalled a reduction in business activity during November - IHS Markit/CIPS

    According to the report from IHS Markit/CIPS, UK service providers signalled a reduction in business activity during November, which ended a four-month period of sustained recovery. Survey respondents almost exclusively linked lower activity to tighter restrictions on trade and temporary business closures due to the coronavirus 2019 (COVID-19) pandemic. Despite a second national lockdown in England and ongoing curbs on customer-facing enterprises elsewhere across the UK, the speed of the downturn was much softer than the slump recorded during the second quarter of 2020. Service providers often cited resilient spending among businesses in sectors that had remained open in November.

    The seasonally adjusted UK Services PMI Business Activity Index dropped to 47.6 in November, from 51.4 in October. As a result, the index was below the crucial 50.0 no-change mark for the first time in five months. The latest reading was higher than the earlier 'flash' estimate in November (45.8) and signalled a much slower downturn in business activity than the survey-record low seen in April (13.4).

    Meanwhile, positive news in relation to vaccines and hopes of a better stage ahead in the pandemic situation led to much greater levels of business optimism in November. The degree of confidence towards the year ahead outlook was the highest since February. Around 60% of the survey panel expect a rise in business activity during the next 12 months, while only 15% forecast a reduction. 

    November data indicated a reduction in UK private sector output for the first time in five months, with weakness across the service economy more than offsetting robust manufacturing growth.

    The seasonally adjusted UK Composite Output Index registered 49.0 in November, down from 52.1 in October and below the neutral 50.0 threshold for the first time since June.

  • 09:31

    United Kingdom: Purchasing Manager Index Services, November 47.6 (forecast 45.8)

  • 09:14

    Eurozone services PMI fell sharply in November - IHS Markit

    According to the report from IHS Markit, driven by sharply reduced services activity, the eurozone’s private sector economy returned to contraction during November for the first time in five months.

    Eurozone PMI Composite Output Index which recorded a level of 45.3, down from October’s 50.0 but slightly better than the earlier flash reading. The headline figure was driven lower by a downturn in service sector activity which fell to the greatest degree since May. In contrast, manufacturing output growth was sustained for the fifth month in a row, albeit at the slowest pace since July.

    The downturn in private sector output was closely linked to restrictions on activity related to continued efforts to stem the spread of global coronavirus disease 2019 (COVID-19). With mobility and social contact restricted, new business volumes inevitably fell in November. 

    The overall fall in new work was the greatest recorded by the survey since May, with notable weakness in sectors such as hospitality and tourism. There were also a decline in new export business, albeit only marginally, for the first time in three months.

    Employment fell for the ninth month running, albeit at the weakest rate in this sequence with modest declines in both manufacturing and services. 

    Meanwhile, input prices increased for a sixth successive month during November. The rate of inflation was solid, albeit a little lower than in the previous survey period. In contrast, output charges declined again, extending the current period of deflation to nine months.

    The Eurozone PMI Services Business Activity Index fell sharply during November, declining to a level of 41.7 from 46.9 during October. Posting below the 50.0 no-change mark for a third successive month, the index signalled the sharpest contraction in services activity since May.

  • 09:00

    Eurozone: Services PMI, November 41.7 (forecast 41.3)

  • 08:56

    Germany: Services PMI, November 46 (forecast 46.2)

  • 08:52

    France: Services PMI, November 38.8 (forecast 38)

  • 08:39

    Central bank should allow yield curve to steepen more - BOJ's Suzuki

    Reuters reports that Bank of Japan (BOJ) board member Hitoshi Suzuki said the central bank should allow super-long bond yields to rise moderately as part of efforts to make its stimulus programme sustainable.

    "Allowing the super-long end of the yield curve to steepen moderately, while keeping 10-year bond yields around zero, would help financial institutions earn more profits," Suzuki told.

    "As such, this will be desirable from the standpoint of maintaining financial system stability, as our monetary easing is prolonged," he said.

    Suzuki also said the BOJ must seek to make its policy framework "sustainable and flexible", including its purchases of risky assets such as exchange-traded funds.

    His remarks underscore a growing concern among policymakers over the rising costs of the BOJ's monetary easing, which has failed to fire up inflation to its elusive 2% inflation target.

  • 08:20

    NZD/USD: Short-term top in place? – UOB

    FXStreet reports that in opinion of FX Strategists at UOB Group, NZD/USD could have charted a short-term top in the vicinity of the 0.7100 yardstick.

    Next 1-3 weeks: “We have held a positive view in NZD for close to one month now. Yesterday, we indicated that ‘while there is still a chance for NZD to move to 0.7100, the month-long rally appears to be over-extended and a break of 0.6980 would indicate that the month-long positive phase has run its course’. NZD subsequently rose to a fresh high of 0.7084. Short term momentum is waning rapidly amid overbought conditions and the risk of a short-term top has increased. A break of 0.7010 (‘strong support’ level previously at 0.6980) would indicate that the month-long positive phase has ended.

  • 08:02

    Asian session review: the dollar stabilized against the euro, but rose against the yen

    TimeCountryEventPeriodPrevious valueForecastActual
    00:30AustraliaTrade Balance October5.8155.87.456
    00:30AustraliaHome Loans October6.0% 0.8%
    01:45ChinaMarkit/Caixin Services PMINovember56.8 57.8


    During today's Asian trading, the US dollar consolidated against the euro and rose slightly against the yen.

    "The euro is now above $1.2, which could be a headache for the European Central Bank, given the near - zero inflation in the Euro area," said CMC Markets analyst Michael Hewson.

    Democratic majority leader in the U.S. House of representatives Steny Hoyer said Wednesday that he hopes to reach a deal on new budget incentives this weekend.

    A day earlier, a group of congressmen from both parties proposed a new $908 billion stimulus package. On Wednesday, House speaker Nancy Pelosi and Senate democratic minority leader Chuck Schumer urged McConnell to use the proposal as a basis for negotiations.

    The pound rose against the dollar. On the eve of the pound fell against the dollar and the euro after the EU's chief negotiator Michel Barnier said that he was not sure whether he could reach an agreement between the UK and the EU on future relations.

    "The pound has fallen from its highest level in three months after recent Brexit - related events revived doubts about the ability of the UK and the EU to reach a trade agreement," said Joe Manimbo of Western Union.

    The ICE index, which tracks the dollar's performance against six currencies (the euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell 0.2%.

  • 07:42

    Biden could rebuild trade deal with Asia-Pacific to counter China’s dominance - think tank

    CNBC reports that think tank Peterson Institute for International Economics said that negotiating a new and improved trade deal with Asia-Pacific countries would help the U.S. to reassert its leadership in the region while countering China’s growing dominance.

    Frayed U.S. ties with Asian allies is an issue that President-elect Joe Biden should work to reverse “perhaps sooner rather than later,” said Jeffrey Schott, PIIE’s senior fellow.

    “The incoming Biden administration’s domestic policies to strengthen US output and employment and to support the most vulnerable in society should not deter it from attending to the dramatic changes in the Asia-Pacific region,” he said.

    Over the last few years, countries in Asia-Pacific have moved on without the U.S. while deepening ties with China, said Schott, an expert on international trade policy. That can be seen in the signing of the 15-member Regional Comprehensive Economic Partnership (RCEP) that included China, he said. China is also negotiating new trade deals and upgrading existing agreements with countries in the region, he added.

  • 07:37

    Options levels on thursday, December 3, 2020

    EUR/USD

    Resistance levels (open interest**, contracts)

    $1.2254 (656)

    $1.2207 (774)

    $1.2165 (1294)

    Price at time of writing this review: $1.2122

    Support levels (open interest**, contracts):

    $1.2069 (85)

    $1.2038 (172)

    $1.1996 (363)


    Comments:

    - Overall open interest on the CALL options and PUT options with the expiration date December, 4 is 107076 contracts (according to data from December, 2) with the maximum number of contracts with strike price $1,1200 (6560);


    GBP/USD

    Resistance levels (open interest**, contracts)

    $1.3512 (2769)

    $1.3472 (966)

    $1.3439 (1010)

    Price at time of writing this review: $1.3393

    Support levels (open interest**, contracts):

    $1.3297 (854)

    $1.3228 (848)

    $1.3187 (718)


    Comments:

    - Overall open interest on the CALL options with the expiration date December, 4 is 223387 contracts, with the maximum number of contracts with strike price $1,3500 (2769);

    - Overall open interest on the PUT options with the expiration date December, 4 is 43805 contracts, with the maximum number of contracts with strike price $1,2700 (11992);

    - The ratio of PUT/CALL was 1.87 versus 1.85 from the previous trading day according to data from December, 2

     

    * - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

    ** - Open interest takes into account the total number of option contracts that are open at the moment.

  • 07:19

    EUR/CHF: SNB on hold while ECB on the move - CIBC

    eFXdata reports that CIBC Research discusses EUR/CHF outlook.

    "The upcoming ECB policy recalibration, code for more stimulus could risk putting more pressure on the SNB, especially were the ECB to surprise and look to take rates further into negative territory. However, as such an outcome remains a low probability scenario, we do not anticipate that the SNB will have to materially dial up the scale of intervention," CIBC notes. 

    "The prospect of a more constructive macro outlook in 2021, predicated upon a vaccine supporting a macro recovery, points towards leveraged CHF long positions, from near six-year highs, being unwound. The position reversal will allow SNB activity to be progressively reduced, this comes as EURCHF should head back towards 1.10 for the first time since November 2019," CIBC adds. 

  • 06:59

    China's service sector growth strengthens in November

    RTTNews reports that survey data from IHS Markit showed that China's service sector expanded strongly in November amid greater customer demand and a sustained recovery in market conditions after the coronavirus disease outbreak.

    The services PMI rose to 57.8 in November from 56.8 in the previous month. The rate of growth was the second fastest since April 2010, exceeded only by that recorded in June 2020.

    New orders climbed the most since April 2010 as export sales grew for the first time since June. Efforts to expand capacity and rising order volumes led companies to increase their staffing levels for the fourth month in a row.

    Input costs increased at the fastest pace since August 2010 due to higher raw material and staffing costs.

    Firmer demand conditions enabled firms to partially pass on their increased cost burdens to clients in the form of higher output prices. The rate of charge inflation was the steepest for just over ten-and-a-half years.

    Business confidence regarding the year ahead strengthened for the third consecutive month in November. The overall degree of positive sentiment was the highest since April 2011.

    The Caixin composite output index came in at 57.5 in November, stronger than 55.7 the previous month. The reading signaled the steepest growth in the private sector since March 2010.

  • 02:30

    Commodities. Daily history for Wednesday, December 2, 2020

    Raw materials Closed Change, %
    Brent 47.87 1.83
    Silver 24.077 0.68
    Gold 1830.516 0.98
    Palladium 2404.19 -0.03
  • 01:46

    China: Markit/Caixin Services PMI, November 57.8

  • 00:31

    Australia: Home Loans , October 0.8%

  • 00:31

    Australia: Trade Balance , October 7.456 (forecast 5.8)

  • 00:30

    Stocks. Daily history for Wednesday, December 2, 2020

    Index Change, points Closed Change, %
    NIKKEI 225 13.44 26800.98 0.05
    Hang Seng -35.1 26532.58 -0.13
    KOSPI 41.65 2675.9 1.58
    ASX 200 1.7 6590.2 0.03
    FTSE 100 78.66 6463.39 1.23
    CAC 40 1.37 5583.01 0.02
    Dow Jones 59.87 29883.79 0.2
    S&P 500 6.56 3669.01 0.18
    NASDAQ Composite -5.74 12349.37 -0.05
  • 00:30

    Schedule for today, Thursday, December 3, 2020

    Time Country Event Period Previous value Forecast
    00:30 (GMT) Australia Trade Balance October 5.630 5.8
    00:30 (GMT) Australia Home Loans October 6.0%  
    01:45 (GMT) China Markit/Caixin Services PMI November 56.8  
    08:50 (GMT) France Services PMI November 46.5 38
    08:55 (GMT) Germany Services PMI November 49.5 46.2
    09:00 (GMT) Eurozone Services PMI November 46.9 41.3
    09:30 (GMT) United Kingdom Purchasing Manager Index Services November 51.4 45.8
    10:00 (GMT) Eurozone Retail Sales (MoM) October -2% 0.8%
    10:00 (GMT) Eurozone Retail Sales (YoY) October 2.2% 2.7%
    13:30 (GMT) U.S. Continuing Jobless Claims November 6071 5915
    13:30 (GMT) U.S. Initial Jobless Claims November 778 775
    14:45 (GMT) U.S. Services PMI November 56.9 57.7
    15:00 (GMT) U.S. ISM Non-Manufacturing November 56.6 56
  • 00:15

    Currencies. Daily history for Wednesday, December 2, 2020

    Pare Closed Change, %
    AUDUSD 0.74139 0.66
    EURJPY 126.51 0.51
    EURUSD 1.21163 0.4
    GBPJPY 139.548 -0.31
    GBPUSD 1.3365 -0.4
    NZDUSD 0.70637 -0.01
    USDCAD 1.29211 -0.09
    USDCHF 0.89473 -0.5
    USDJPY 104.409 0.11
3 December 2020
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